Big Boost in Chinese Exports Could Lead to Rapid Tightening

Tom Malthus submits:It was widely anticipated that Chinese exports would turn positive in December, but very few expected by such a large magnitude--17.7% y/y. A portion of the increment was due to a small base effect from a decline in exports in December of last year. However, on a monthly basis the value of exports still rose to USD130.7bn from USD113.5 in November. Increase were broad based with textiles rising 25% y/y, compared to 7.3% in November, while mobile phone exports climbed 68.9% y/y in December, versus 13.5% a month prior. Machinery exports jumped 39.6% during the month. Chinese exports to the US rose 15.9% in December (-1.72% in November), while exports to the EU rose 10.2%.During December Chinese imports grew by an almost unbelievable 55.9% y/y, versus 26.7% in November. Strong commodity imports continue to feed China's investment led recovery. While, a rise in imports from other Asian countries could be an indication that Chinese exporters have a bullish view on their near-term outlook; these imports tend to an input into China's export processing trade. Complete Story »

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